- 8 May, 2019
- Listing your property on Airbnb and Booking, Payouts and taxes, Pricing, Short term rental
Whether we are a guest or a host, we pay airbnb fees and commissions when we use theirs or any other paltform…
Short-term or long-term renting? Via AirBnb, Booking or any other platform, or through a realtor? Which option can be more profitable for you? What would be your responsibilities in both cases? Which of these two options depreciates your property faster? How should you furnish the dwelling? Are there going to be issues with your neighbours? Here are a few things to keep in mind when making a decision.
This is undoubtedly the most important component whether you prefer short-term or long-term renting! The best-selling areas are the top centre. For short-term rentals, this is a must. On the periphery of the centre you would have reservations as well, but certainly lower occupation on lower prices. In the suburbs, it is much better to go for renting your property long-term.
It is legal to rent your apartment short-term. There are some places on earth with some limitations but overall it is legal. Sometimes neighbours will oppose and explain the contrary. There is a registration procedure for your apartment, after which you are allowed to rent your apartment short-term. Many of the owners of apartments do not register and work without the necessary documents. This, as well as whether to pay taxes, is entirely your choice and responsibility.
If the furniture is not so new, the apartment it is not very well renovated and you do not want to spend more money making it better, then my advice is to go for a long term renting. At the moment there is a big deficiency for apartments rented long term in the centre, precisely because many people began to rent their homes short term. Without a big investment, you can rent long term in the centre for a good price.
To rent short-term I advise making the apartment very well renovated and furnished. The best option is to make an overhaul and then buy brand new furniture. Go for minimalism. But keep in mind that you have to rent a fully furnished apartment. Well, and interesting designer dwellings are definitely selling better. The apartment should be very cosy and neat. On the market in most major cities, there are more and more apartments that are very original and offering more and more comforts.
By renting short-term you can still use your property. For example, if you decide you want to give it to your friends or guests for a few days, you can block the calendar for the dates in question easily. Then keep receiving reservations for the dates that are not occupied. Of course, it’s not a good idea to cancel reservations. The platform will sanction you for this.
If you find a good long-term tenant, your depreciation may be almost zero. There are even cases where he can repair and furnish, whether it is at your expense or his, that is a matter of agreement between you. Unfortunately, this type of tenants are rare and quite often repainting after a tenant is a must.
In short-term leases, the depreciation of the property is very small. Most of the guests really treat your apartment as their own and take care of it. Because guests are constantly changing, your apartment is cleaned several times a week. This avoids equipment, furniture and floor covering/weaning. Extremely rare are the cases where there is some damage to the apartment, which is usually trivial – a broken glass or a dish, a scratch on one of the walls, a stained towel or a pillowcase. In case of more serious damages, you can use the Airbnb guarantee fund. Against proof of damages and invoices for the costs incurred for repair, the platform will refund you the full amount. There is no such fund at booking.com and other platforms. There are also options for a deposit when a reservation is made.
Short-term renting is safe, damage is rare and depreciation is much lower compared to long-term rent.
Depending on the location, size, furnishings of the dwelling, earnings may be several times higher when you are short-term renting compared to long-term renting. Another very important factor is how you manage your property – how you serve your guests, how you maintain your property, and so on.
I guess you’re excited about how much the income from your property will be? It would be unreasonable to commit myself to a specific figure, especially if I have not seen the apartment. Factors for success are too many in fact. But let’s say a studio or a small one-bedroom apartment in the top centre of Sofia could have an income of 500 – 900 EUR per month. Compared to 300-400 EUR long-term rent looks good, but let’s not forget the costs as well as your engagements! In recent years the trend has been to reduce the accommodation prices in apartments in Sofia. Despite the increase in the number of tourists, the apartments also increase, which leads to a drop in prices.
In the future, I think that well-managed properties over the years will have a serious advantage and will keep or raise their prices.
For long-term rent, all overheads are at the expense of the tenant. The only thing you need to keep track of is if he pays his bills on a regular basis. For short-term rentals, overhead charges are entirely at your own expense. The summer costs for electricity, water, heating, television, the Internet and others are not dramatically high. The most would spend the air conditioner if your property has one. However, during the winter period, high bills are mainly due to heating, whether you are on a thermal power plant or electricity. Do not expect your guests to stop heating, stoves and air conditioners when they are not in the apartment. There are also such guests, but most will just leave everything on most of the time. The good thing is that winter is short and quite often not so cold. The real higher bills are 2-3 months.
In the case of long-term renting, the commitments at the beginning are more – meetings with brokers and potential tenants. Then you have to collect your rent monthly, either by bank or by hand, a matter of arrangement. You should also keep an eye on whether your tenant pays his bills regularly. It’s also an option to pay them to you. Of course, you will have to keep an eye on your property from time to time to keep track of its condition. Minor repairs such as changing bulbs, faucets, damage from improper use of appliances and furniture are at the expense of the tenant and should be taken care of by himself. Your commitment is to support any appliances and furnishings that over time are depreciated. Of course, all this is subject to agreement between you and the tenants.
When short-term renting you need set simple criteria on which the platforms selects the tenants for you. Before each new guest, your apartment needs to be cleaned, bed linen and towels changed. Laundry is also your responsibility. Communication with guests goes through the day, until late at night, as well as their check-in and check-out. Some guests come with flights at night. There are, of course, self-check-in methods – key boxes, pin-lock doors, sim card unlocking, and more. However, you should be available if guests cannot get it right, which happens relatively rarely, but it happens. There must be someone available to help them check-in otherwise, you will suffer sanctions from the platforms if they cannot check-in and have to go someplace else.
During the stay of the guests, you have to answer any questions in order for the guests to be satisfied. You do anything for a nice review. Cases in which there are problems with appliances in the apartment such as a broken TV, internet, boiler, cooker, etc. you should respond as soon as possible, if possible immediately. If someone is visiting you for 2-3 days and there is no hot water or internet, you will not like the review that he will write to you. In short, you should be available 7 days a week at almost any time!
In short, more effort is required to prepare an apartment for short-term renting, management and responsibilities are much more, the depreciation and risks are less, the profit is greater.
If the apartment is in the top centre, you are ready to repair it, furnish it originally and make it cosy, my advice is to rent it short term to earn more. You have to organize the cleaning, communicate with guests, set up and maintain the platforms and you have to be available at almost all time. If you think it is too much, but you still want to rent short-term, look for someone to do it for you.
Keep in mind that you can always stop an apartment from the short-term rental platforms and rent it long term. I’d say there is no risk at all.
The choice is entirely yours! 🙂 For additional questions, please contact me.
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